Ethylene Production Costs From Ethane

The procedure adopted is to establish a base case, which is representative of the average operation of interest and then to address the sensitivity of the base case against the key economic variables. The base case is developed around the production of 500,000 t/y ethylene using ethane at a cost of 7.19/GJ ( 373.3/t). This ethane price is discussed in an earlier chapter and corresponds to a natural gas price of S6.37/GJ (average US 2007 price) into a suitably large-scale gas plant. 

The capital cost of a 500,000 t/y ethane cracker is 718 million (2007). The non-feedstock operating costs are taken as 10% of the capital per annum or 71.8 million per year (MM /y). If the plant is built in three years on the basis of a 20 year life with a DCF rate of 10%, annual return on capital, as detailed in the Appendix, is 14.4% or 102.8MM/y. 

The production economics can be estimated as a function of ethane price using the assumptions  

The two systems described by Tables 7.1 and 7.2 are evaluated. For ease of discussion, the flow-sheet described by Table 7.1 where all possible cracked products are sold at prevailing market prices is referred to as OPEN. The case where some of the product is recycled to feed or fuel (Table 7.2) is referred to as CLOSED. 

Setting the ethane price to 7.19/GJ (which corresponds to a gas plant price with gas available at 6.37/GJ) gives the ethylene production cost of 726/tonne for the OPEN system and 869/toime for the CLOSED system. The cash flows are detailed in Table 7.3. 

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Figure 6 indicates the ethylene production costs from various feedstocks in a U.S. billion lbs/yr ethylene plant based on premium valued by-products. If the predicted ethane and propane increases did in fact... 

The world s 140 million metric tons of annual ethylene capacity almost exclusively employs steam cracking of hydrocarbon feedstocks [5]. The majority of the feedstocks come from petroleum refining, such as by cracking of naphtha, but some producers use liquefied natural gas as a feedstock. In Brazil, where sugar cane is plentiful, Braskem has built a 200,000 metric ton per year ethylene plant based upon the dehydration of sugar-derived ethanol [6]. In the United States, natural gas liquids, a mixture of ethane, propane, butane, and other hydrocarbons, are available from shale deposits. The ethane is separated and cracked to make ethylene. Depending on the cost of oil and natural gas, this can be an economic advantage. In 2012, about 70% of United States ethylene production was from ethane [7]. 

The process achieves about 90% conversion of ethane to VC. With the elimination of so many intermediate steps compared to the traditional EDC route, this process could achieve VC production cost savings of up to 35% anywhere an adequate supply of ethane can be found. That could even include the recycle stream from a heavy liquids olefins plant. If these killer economics persevere, this technology could grab all the growth in VC capacity and even replace most of the conventional VC capacity in a couple of decades. That s what happened to the acetylene-based route to VC when the ethylene-based route came on stream in the mid-20th century. 

Dow Chemical in Midland, USA, the microprocess technologist Velocys in Plain City, USA, and PNNL in Richland, USA, as research institute in microreactor technology have a public funded project on high-intensity production of ethylene and other olefins by oxidation such as the formation of ethylene from ethane [1], A two-step reactor engineering is performed, starting with a bench-scale reactor with microchannel dimensions equal to the latter commercial unit and followed by numbering to the latter. An economic analysis with focus on reactor costs and energy consumption completes the project. 

Small scale operations are widely used to produce small amounts of ethylene for a specific purpose (e.g. styrene). This graph illustrates that high ethane prices are a significant threat to these operations because the cost of ethylene transport from a larger operation (typically 100/t for ship based transport) is lower than the rise in production cost due to the loss of economy of scale. 

In Western Europe, approximately 95% of ethylene is produced from steam-cracking naphtha. In the United States, ethylene manufactured from ethane accounts for approximately 70% of ethylene production, while steam-cracking naphtha accoxmts for 30% of ethylene production [11]. In the future, ethane will almost certainly be used for the vast majority of ethylene manufactured. In the Middle East, ethylene production is based on ethane (or ethane/propane mixtures) derived from natural gas or extracted from crude oil. In addition, energy costs in the Middle East are about five times lower than in Europe. 

Since the early 1970s, scientists in the petrochemical industry have understood that the manufacture of ethylene from methane or methanol could significantly lower capital and operating costs relative to ethylene production based on todays use of naphtha or ethane. 

During the 1950s the petroleum industry experienced a rapid development. A new abundant and cheap feedstock, naphtha, became available for the chemical industry and all ethylene needed for polyethylene and other chemical products started to be made from fossil feedstock. Combined with the development of cracker technology this has led to the very cost-effective steam crackers operated today. A typical size of a cracker built today has an ethylene production capacity of up to 1 metric tonnes/year. Gradually ethane and propane obtained either by separation from natural gas or from flare gas in oilfields have been used as feedstock. In areas with large oilfields and low population the latter provides a cheap feedstock. This is an important reason why most of today s investments in cracker capacity are made in the Middle East. 

It is possible to point out a number of conclusions from this figure. Firsf of all if is understandable why much of the investment within the petrochemical industry is directed to the Middle East. The feedstock, ethane from flare gas, is cheap and a dedicafed efhane cracker requires a relatively low investineni. If is also seen that the coming investments in bioethylene in Brazil, with a production cost of approximately 800/tonne, are very competitive with the fossil-based US alternatives, having a production cost of roughly 1050/tonne. The variable cost is relatively low but compared to the Middle East ethane alternative the investment is higher due to the fermentation plant. Furthermore, it is important to point out that the investment for the ethanol-to-ethylene plant is very low as seen for ethanol-purchased alternatives. For these cases it is important to stress that these are valid for the conditions in the USA, i.e. the price level of ethanol in the USA. In Europe it is possible to get exemption from the import duty on ethanol imported from Brazil. This would lead to a variable cost of approximately 700/tonne and thus a production cost of approximately 900/tonne. 

The ethylene feedstock used in most plants is of high purity and contains 200—2000 ppm of ethane as the only significant impurity. Ethane is inert in the reactor and is rejected from the plant in the vent gas for use as fuel. Dilute gas streams, such as treated fluid-catalytic cracking (FCC) off-gas from refineries with ethylene concentrations as low as 10%, have also been used as the ethylene feedstock. The refinery FCC off-gas, which is otherwise used as fuel, can be an attractive source of ethylene even with the added costs of the treatments needed to remove undesirable impurities such as acetylene and higher olefins. Its use for ethylbenzene production, however, is limited by the quantity available. Only large refineries are capable of deUvering sufficient FCC off-gas to support an ethylbenzene—styrene plant of an economical scale. 

Steam crackers provide the traditional cost-effective approach for olefins production from lighter feed stocks such ethane, propane, naphtha, and AGO. However, these options typically provide higher E/P ratio. To meet the increasing demands of ethylene and particularly propylene, refiners and petrochemical producers are planning integrated facilities. The objectives are ... 

Figure 6 shows that with the present level of premium valuation for by-products, a 1.1 /lb naphtha price would result in this feedstock having an advantage over ethane, propane or butane at 1 /lb. The cost for naphtha-based ethylene in this case would be only 1.94 /lb vs. 2.04, 2.36, and 2.47 /lb from n-butane, propane, and ethane, respectively. The breakeven prices for the light feedstocks that would correspond to the 1.1 /lb naphtha price would be 0.6, 0.82, and 0.95 /lb for ethane, pro-... 

Currently in the United States, ethylene cost is lower via production from the light feedstocks regardless of the type of by-product valuation applicable. Of these, n-butane appears most interesting if premium prices for by-products can be applied. Ethane is best for limited by-product outlets. 

However, while stranded gas supplies are essentially unlimited, access to low-cost ethane for ethylene plants does have limits. Ethane supplies are developed only with natural gas or crude oil production regional consumption and LNG demand will set the demand for natural gas, while OPEC will determine crude oil output. We estimate that the available ethane in the Middle East could only cover about 40 percent of all new worldwide ethylene demand through 2010, by which date the region s ethylene market share would reach 17 percent. Even if stranded natural gas and ethane in other locations are put to use, they will be far from covering all demand growth, and chemical producers will need to continue to rely on the established types of feedstock, while at the same time considering alternatives (Fig. 16.5). 

Methane-based commercial production of ethylene via oxidative coupling has been investigated, but to date the lower per pass conversions required for acceptable ethylene selectivities combined with purified oxygen costs make this process noncompetitive with thermal cracking of ethane from natural gas liquids. 

The major source of sensible heat is in the reactor product which emerges at 1500-1600°C. The initial (and most cost-effective) quench step is carried out using ethane which takes the temperature down to 1150°C. The ethane cracks to ethylene rapidly absorbing a considerable amount of heat. It is therefore useful to remove as much ethane from the feed gas as possible by-product ethane is also available from the hydro-oligomerisation (see below). Two options were studied for quenching to a temperature at which acetylene no longer decomposes. The gas stream must be further cooled before entering the first phase of gas separation. 

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